Wednesday, July 20, 2011

Supply side sense

Even the Wall Street Journal can find a nut once in a while:

"Dearth of Demand Seen Behind Weak Hiring."

Like I said in my earlier post, you don't hire unless you have someone to sell to. Henry Ford figured this out, when he paid his workers the scandalous wage of $5 a day (twice what everyone else was paying)> Not only did turnover in his factory drop to levels so low they weren't worth measuring (compared to the average of 60%!), his workers could afford to buy his cars, thus creating demand.

Apparently, those lessons were forgotten by the so-called fiscal conservatives.

No comments: